Pan Africanism : Africa Looms Larger on U.S. Oil Map...

NAIROBI, July 23 (Xinhuanet) - Africa's vast oil fields, discovered in recent years, have attracted much attention from countries around the world, including the world's top oil consumer, the United States, which is increasingly focusing on African oil to secure stable energy supply. As the world's biggest oil consumer, the United States devours 20 million barrels of crude oil everyday, almost one-third of the global consumption. Meanwhile, its oil consumption is very much import-dependent, with more than 60% from the Middle East.

However, after the September 11 attacks and the U.S.-led war against terror, many experts and lobbyists have expressed concerns that instability and anti-Americanism in the Middle East could endanger oil supplies. President Bush has said he wants to pursue energy sources that are closer to home, so the country is less dependent on supplies from "unstable" parts of the world.

The United States, which is stepping up oil exploration in the Gulf of Guinea basin off the coast of West Africa, has been striving to keep crude flowing into its oil-hungry economy. "African oil should be treated as a priority for the U.S. national security post 9/11. I think that the post 9/11 it has occurred to all of us that our traditional sources of oil are not as secure as we thought they were," U.S. Congressman William Jefferson once told a meeting of the African Oil Policy Initiative Group (AOPIG). Africa now has the third-largest oil reserves in the world, only after the Middle East and South America. According to the OPEC statistics, till the end of 2003, there were 93.55 billion-barrel finds of oil on the continent, accounting for about 10% of the world's total. Currently, the continent has an output of 8 million barrels a day, nearly 11% of the global daily yield.

The U.S. government is gradually making policy shifts to search for new oil supplies in Africa, a continent that in the past had counted for little in its global strategy. In the Bush administration's 2003 National Security Strategy report, cooperation with African oil producers has been underlined as the important approach to "strengthen the U.S. national security." The more hawkish advocates of the policy even want the U.S. military to create a Gulf of Guinea Command - similar in scale to the Korea Command - and to build a naval base on the island country of Sao Tome and Principe to protect the oil supplies.

U.S. oil companies are also pushing for government policies that improve access to crude supplies in Africa. Dave O'Reilly, chief executive of the #2 U.S. oil company, ChevronTexaco Corp., said that protecting U.S. energy needs means recognizing issues not just in energy policy, but also in foreign and trade policies. Efforts are not only from the U.S. government, oil executives and policymakers are now both exploring West Africa's vast oilfields to secure cheap oil, and the rewards are potentially great. According to the U.S. Department of Energy, by 2003, 15.3% of U.S. oil comes from Africa, and U.S.-owned firms are investing $10 billion a year there. And it was estimated that by 2015, West Africa will represent 25% of the total U.S. oil needs - and by 2020, will be exporting to it some 770 million barrels of African oil a year.

In May 2000, former U.S. President Bill Clinton signed the African Growth and Opportunity Act (AGOA) in order to integrate Africa into the global economy by boosting trade with the United States, the continent's largest single-country market. Oil represents the lion's share of what Africa sells to the United States (some 87% of its exports), concentrating AGOA's influence into a handful of countries, including Angola, Chad, Gabon and Nigeria, the continent's top oil producer and ranked 11th worldwide. Nigeria is already the fifth largest exporter of oil to the United States, and with 1.5 million barrels a day flowing into U.S. ports, West Africa exceeds Saudi Arabia as a source of U.S. imports.

The U.S. companies' oil exploration in the Gulf of Guinea basin has covered an area of more than 7,722 square miles, involving nearly 10 countries. ChevronTexaco Corp. is planning an investment of $20 billion in the next five years, to further improve its oil-production capacity in Africa. The company's executive, Dave O'Reilly, said improving security and the investment climate in West Africa, which supplies light, sweet crude that is in high demand, should be a priority in the U.S. foreign policy.

Another energy giant, Exxon Mobil Corp., which is going to invest $50 billion in the area in the next 10 years, said it had begun offshore production at a major facility off Angola, which is counting on oil revenues to help its recovery from three decades of civil war. Exxon/Mobil said its local subsidiary had started production of the $3.5 billion "Kizomba B" project to develop one billion barrels of oil lying more than 198 miles off the coast of Angola.

Angola is fast becoming a world oil player as sub-Saharan Africa's second-largest producer after Nigeria, with output expecting to hit 2 million barrels a day by the end of 2007. Exxon/Mobil and its foreign partners in Angola - Britain's BP, ENI of Italy and the Norwegian firm Statoil - have announced 38 discoveries in Angola, with the potential to yield up to 4.5 billion oil-equivalent barrels.

If Africa could gain control of these oil fields, they could gain a great amount of wealth. As it is most of these fields are sold to major US & French oil companies with all profits going to dictators that do not pass the wealth to their people. For many African countries oil is more of a curse than a blessing. It has allowed worthless leaders to gain a greater foothold in the country.

Your comments are certainly on point, Pan. Here is an interesting account of the session, "What’s Holding Back Africa’s Growth?" at the World Economic Forum's Africa Economic Summit 2004:

Asked to outline the main contributing factors to positive economic growth in Africa, Trevor Manuel, Minister of Finance of South Africa, identified two issues – the environment in which Africa operates and the issues of Africa itself. The environment includes relationships shaped by the extraction of wealth, the lack of protection for African development, and Africa’s relationships with external capital markets. African issues include governance and capital outflows, with 60% of Africa’s savings invested in the northern hemisphere.

Manuel urged African countries to join in a campaign to "name and shame" companies involved in corruption on the continent. He also said the companies that were party to corruption at the Lesotho Highlands Water Project should be denied contracts elsewhere in Africa. He was responding to Carl Grim, Chief Executive Officer of Aveng, a South African civil engineering firm, who said bribes demanded for getting machinery spare parts into African countries raised the cost of doing business on the continent and discouraged investment. "We need to hit at the corrupters as hard as we hit at those who take bribes," Manuel said. "The public and private sectors must campaign together on this. We must have a campaign of name and shame."

He said South Africa and Lesotho are working together to blacklist the companies involved in corruption in the Lesotho project, "It is imperative that we are joined in a campaign to ensure that those companies are denied contracts. That will open space for companies that have conducted themselves impeccably and have done no wrong."

Manuel judged, from looking at the salaries of government officials in Africa, that they could not live off what they earned. The result is that "people have to go after baksheesh (bribes and political corruption) in order to survive."